Irrevocable power coupled with interest and equitable assignment of decretal proceeds support execution by the bank.

A power of attorney created for valuable consideration to secure a bank's interest in decretal proceeds was held irrevocable under Section 202 of the Indian Contract Act, as it was coupled with an interest. Although the instrument was not a legal assignment in form, it earmarked the decretal amount as a fund for discharge of the bank's debt and therefore operated in equity as an assignment to that extent. The bank could also execute the decree in its own right under Section 146 of the Code of Civil Procedure, even though Order XXI, Rule 16 was unavailable and the decree stood in the appellant's name. The execution was allowed to continue.

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Issues: (i) Whether the power of attorney was a power coupled with interest and therefore irrevocable; (ii) whether the transaction under the power of attorney amounted to an equitable assignment of the decree to the extent of the bank's debt; (iii) whether the bank could execute the decree in its own right notwithstanding that the decree stood in the appellant's name and that Order XXI, Rule 16 of the Code of Civil Procedure was not available.

Issue (i): Whether the power of attorney was a power coupled with interest and therefore irrevocable.

Analysis: The authority given to the bank was created for valuable consideration and was intended to secure the bank's interest in the amount recoverable under the decree. Section 202 of the Indian Contract Act, 1872 protects an agency where the agent has an interest in the subject-matter, and such authority cannot be revoked to the prejudice of that interest. The document itself described the authority as irrevocable and was framed to enable the bank to realise the decree amount for satisfaction of the appellant's liability.

Conclusion: The power of attorney was a power coupled with interest and was not revocable.

Issue (ii): Whether the transaction under the power of attorney amounted to an equitable assignment of the decree to the extent of the bank's debt.

Analysis: Although the document did not contain words of transfer and did not operate as a legal assignment, it earmarked the decretal amount as a special fund for discharge of the debt due to the bank and authorised the bank to realise and appropriate that fund. An engagement to pay a debt out of a particular fund constitutes an equitable assignment of that fund to the extent necessary to satisfy the debt.

Conclusion: The transaction amounted in equity to an assignment of the decretal amount to the extent necessary to discharge the bank's debt.

Issue (iii): Whether the bank could execute the decree in its own right notwithstanding that the decree stood in the appellant's name and that Order XXI, Rule 16 of the Code of Civil Procedure was not available.

Analysis: An equitable assignee who cannot invoke Order XXI, Rule 16 is nevertheless entitled to execute the decree under Section 146 of the Code of Civil Procedure, 1908. The form of the execution application, filed in the appellant's name because of the power of attorney, did not control the substance of the matter. The bank's right to proceed was preserved, and there was no reason to terminate the execution merely because it had initially been instituted in the appellant's name.

Conclusion: The bank could execute the decree in its own right and the execution could validly continue.

Final Conclusion: The appellant's objections to the execution failed in substance, and the bank was entitled to proceed with execution for recovery of the debt secured by the arrangement.

Ratio Decidendi: A power of attorney created to secure an agent's interest in a fund is irrevocable under Section 202 of the Indian Contract Act, 1872, and where the fund is specifically appropriated for discharge of a debt, the arrangement operates as an equitable assignment enforceable in execution under Section 146 of the Code of Civil Procedure, 1908.

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